Philanthropists move to rescue ICEF Public Schools

Broad, Riordan and Baxter donate $700,000 to help stabilize the operator of 15 schools in mostly low-income minority L.A. neighborhoods.

A group of the city's leading philanthropists, including billionaire Eli Broad and former mayor Richard Riordan, rallied Monday to save ICEF Public Schools, one of the nation's largest and most successful charter school companies, which was teetering on financial insolvency.

ICEF, which operates 15 schools in low-income minority neighborhoods of Los Angeles, was virtually out of cash, unlikely to meet its Oct. 1 payroll. The nonprofit faced a $2-million deficit in the current budget year as well as substantial long-term debt.

The collapse of ICEF would have been a blow to the charter movement and to the 4,500 students and several hundred employees of an organization whose results have impressed many observers. Charters are independently run public schools that are free from many regulations that govern traditional schools.

ICEF representatives and others said the group's budget problems were caused by insufficient reserves; an overly ambitious expansion — 11 new schools in three years — that resulted in costly debt; and a reluctance to make cuts affecting students. These factors were exacerbated by the recession, which sharply reduced state funding to schools, and this year's late state budget, which has delayed payments to schools.

The rescue plan that emerged Monday was less disruptive than one under discussion as recently as Sunday. That plan would have broken up ICEF, distributed schools and students among other charter schools and forced out founder Mike Piscal.

Instead, Piscal will remain to oversee academic programs. But he'll now report to new part-time chief executive Caprice Young, a former L.A. school board president who became a national force in the charter movement as head of the California Charter Schools Assn.

"I'm thrilled that our supporters came through when we needed them," Piscal said. "We were considered too good to fail."

Riordan becomes chairman of the ICEF board. The new vice chairman is Carl Cohn, a former schools superintendent in Long Beach and San Diego.

Riordan is contributing $100,000; Broad $500,000, and philanthropist Frank Baxter $100,000—jump-starting a short-term $3-million campaign to stabilize ICEF. All are longtime supporters of charters and frequent critics of the Los Angeles Unified School District.

ICEF had tried to limit cuts to arts and athletic programs, but it did close one school and consolidate two others. And teachers are reporting belt-tightening at school sites. In an interview, one said that her students lack sufficient textbooks and that staff also was recently cautioned not to photocopy from the texts because of a paper shortage.

A teacher in another school said that instructors there were ordered to cover additional classes during former planning periods to cut down on staffing needs and that class sizes have increased substantially over several years. The teachers asked not to be named out of concerns for their jobs.

Academically, ICEF schools have generally delivered higher test scores than most nearby traditional schools, in some cases closing the achievement gap that separates black and Latino students from their white and Asian counterparts. About 71% of ICEF's African American elementary students scored at the "proficient" level or better on standardized tests, matching the performance of white students statewide and surpassing African American students statewide by 28 percentile points.

From its inception, ICEF's clientele was almost exclusively African American in a region where the overwhelming majority of other public school students are Latino. In recent years, however, increasing numbers of Latino students have been enrolling.

Other charters also have faced financial struggles. Green Dot Public Schools shut down its Animo Justice high school at the close of the school year.

Green Dot chief executive Marco Petruzzi said his organization has used reserves and loans to tide it over until the state provides money owed to schools, but he noted that, unlike school districts, charters lack ready access to low-interest short-term loans.